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Everything You Need To Know About Eco-Efficiency

Written by: Inchainge | 3 minute read | Last updated on: March 19th, 2024
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Eco-efficiency is more than just a concept to reduce over production. It is a way of life that encourages sufficient but balanced production of goods to eliminate the scale of manufacturing waste. It envisions a method where technology synchronizes with the limited nature of natural resources to create a streamlined process of production and consumption. To elaborate more on the idea of eco-efficiency, this article will address the following topics:

Topics in this article
1. What is eco-efficiency?
2. Benefits of eco-efficiency
3. What is the relation between eco-efficiency and value chain?

What is eco-efficiency?

The phrase eco-efficiency was first coined in 1992 by the World Business Council for Sustainable Development (WBCSD) in their book ‘Changing Course’.  The book describes eco-efficiency as,  

“Eco-efficiency is achieved by the delivery of competitively priced goods and services that satisfy human needs and bring quality of life, while progressively reducing ecological impacts and resource intensity throughout the life-cycle to a level at least in line with the Earth’s estimated carrying capacity.” 

Eco-efficiency encourages in creating more value for a product to increase its shelf-life and in the process, closing the loop on the product. It gives businesses the scope to explore the triple bottom line, where companies explore ideas to add value to all the 3Ps – People, Prosperity, and Planet. The WBCSD also notes some fundamental elements of eco-efficiency, such as: 

  • A reduction in the material intensity of goods or services; 
  • A reduction in the energy intensity of goods or services; 
  • Reduced dispersion of toxic materials; 
  • Improved recyclability; 
  • Maximum use of renewable resources; 
  • Greater durability of products; Increased service intensity of goods and services. 

 

Benefits of eco-efficiency

A lot like its sister model circular economy, eco-efficiency has its own set of benefits. It includes strategies which rely heavily on technological innovation, research and development, a relooking at business processes, and clear and transparent marketing communication. According to the Government of Canada, eco-efficiency can have several practical benefits, such as: 

  • Reduced costs through more efficient usages of energy and materials
  • Reduced risk and liability by “designing out” the need for toxic substances
  • Increased revenue by developing innovative products and increasing market share
  • Enhanced brand image through marketing and communication improvement efforts
  • Increased productivity and employee morale through closer alignment of company values with the personal values of the employees
  • Improved environmental performance by reducing toxic emissions and increasing the recovery and reuse of “waste” material

What is the relation between eco-efficiency and value chain?

The value chain consists of the entire range of activities that the company needs to fulfil to make a product. The value chain holds a significant position in the workings of a company because this is where the product begins its journey in the value cycle – right from procuring raw materials to consumption. It is within this value chain that the product is instilled with its value. The product begins its upward journey on the value hill the moment it reaches its manufacturing phase. It attains maximum value when it is consumed.  

However, in the traditional strategy, the product will lose its value the moment it begins to climb downward – right after it has been consumed for its full utility. This is where the relationship between eco-efficiency and value chain comes into play.  

Eco-efficiency compels companies to take a better look at their manufacturing methods to ensure the product retains its value for a longer time. It reduces the linear approach of take-make-waste and necessitates companies to be less dependent on natural resources. It encourages the development of new and long-lasting technological progress that promotes environmentally friendly methods of consumption. 

Want to know more?

Being eco-efficient isn’t just about being aware, but about putting circularity into practice. But what is the right way to do so? The Blue Connection, an innovative web-based business simulation game, is modelled around circularity and gives the participant the scope to learn by doing. It engages participants in the transformation from a linear to a circular value chain by implementing a circular strategy for a virtual e-bike manufacturer. In teams of 4, participants will represent the functional roles of VP Finance, VP Purchasing, VP Supply Chain, and VP Sales. Experience the circular way of doing business for a sustainable future! 

Now you know

Now you know that Eco-efficiency is an industry-wide initiative where companies strive to efficiently utilize all raw materials to maximize production while reducing waste generation. It comes with several benefits such as reducing costs, risks, and liability. At the same time, it improves technological advancements, increasing productivity and employee morale, and recovery of raw materials for reuse or recycling purposes.

Sources
  1. The concept of eco-efficiency was first introduced by the World Business Council for Sustainable Development (WBCSD www.wbcsd.org) in the book ‘Changing Course’, published in the process of preparation for participation of the business sector in the 1992 Rio Earth Summit.
    http://www.ejolt.org/2015/02/eco-efficiency/
  2. Running an environmentally friendly business helps you reduce your impact on the environment and preserves natural resources. Your business can help the environment in many ways.
    https://www.business.qld.gov.au/running-business/environment/environment-business/benefits
  3. Eco-efficiency strategies include technological innovation, investment in research and development, improvement of business processes, and accounting for market forces. These components are often part of integrated pest management (IPM) systems that include alternatives to pesticides, but its implementation is often thwarted by commercial realities and technical challenges.
    https://onlinelibrary.wiley.com/doi/abs/10.1002/ps.5560

You might want to learn more about

The Blue Connection

The Blue Connection is an innovative web-based business simulation game. It engages participants in the transformation from a linear to a circular value chain by implementing a circular strategy for a virtual e-bike manufacturer. In teams of 4, participants will represent the functional roles of VP Finance, VP Purchasing, VP Supply Chain, and VP Sales. Experience the circular way of doing business for a sustainable future!

Circular Economy

In this article Inchainge discusses everything you need to know about the circular economy. What is a circular economy, and why is it so important? Read more in our article and learn how Inchainge can offer you the possibly to experience the circular economy in our business games.

What are the 3Ps of Sustainability?

Companies today are focusing on integrating sustainability as a primary component of their business strategy. They are now prioritizing the 3Ps or the triple bottom line as opposed to the traditional method of concentrating on the “bottom line”.

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